The recession was tough, but bridal and customer service — not gold trading — held the answer.
[dropcap cap=O]ver the last two years, I have been dismayed by what’s happened to so much of the jewelry industry. Jewelers saw huge losses beginning in 2008 and many changed their business plans to survive the great recession. [/dropcap]
Not only did sales fall across the board, but, despite steeply rising metal prices, the average dollar value of sales plummeted. This continued even as sales began to stabilize. Additionally, many jewelers became dependent on buying scrap gold to survive, even though that is no way to survive over the long run. Sooner or later, those people will find themselves back in the hole that forced them into scrap buying to begin with: They simply aren’t selling enough jewelry.
Admittedly, I am not running a typical jewelry store. I make everything I sell (except for a line of knives), and most of the designs are unique. I work only in high-karat gold and platinum and sell branded diamonds and top-quality colored stones.
Well before the recession settled in, I was already running a very lean operation. I delegate the things to people who are better at it than I am. So, my wife takes care of the finances. I have an accountant. I have a woman who handles my graphics work. I have a great computer tech. What I do are the things I am really good at: designing, making and selling my jewelry.
Until December 2008, we had been having a good year. That month was off significantly, but our figures for 2008 were still up 5 percent over 2007. In 2009 we watched our figures meandering downwards, but since I am the one on the floor selling, it became apparent that bridal wasn’t going to be that affected. People were still getting married.
So I pumped out a number of new wedding band designs and made sure that they were kept stocked. Like almost everyone in the industry, I was down for the year in 2009 — 15 percent.
Throughout this period, I refused to compromise on quality and continued to focus on what has always made my store a great place to shop: well-made, unique designs, utilizing the highest quality materials and servicing the heck out of the customers who were here.
2010 was an equally trying year in many ways. Gold prices skyrocketed. I continued to adjust to the new reality by boosting prices where necessary (not by scrimping on metal content) and by offering customers the deal that if they took the piece out of the case, it would be at the old gold price.
The worst of the recession actually came for us in early 2010 when we lost a lot of ground on 2009. Still, by continuing to work on the things we were selling (yes, bridal again) and watching gold prices, we made up for all of the lost ground and ended with a very strong December (up 10 percent) and slightly up for 2010 as a whole.
I did not enter the scrap buying business. I did not start selling sterling silver or lower-karat golds. I did not lower my prices. In 2008, my average sale price was around $2,000 (excluding repairs and appraisals). In 2009, it was $2,000. In 2010, $2,300.
Sometimes if you stick to your guns, stick to what you’re good at, and refuse to compromise, you can find the golden brick road.
[smalltext]DANIEL R. SPIRER is a graduate gemologist and owner of Daniel R. Spirer Jeweler in Cambridge, MA. E-mail him at daniel@spirerjewelers.com.[/smalltext]
[span class=note]This story is from the May 2011 edition of INSTORE[/span]